When Will it be Safe to Jump Back Into the Gold and Silver Pool?
Once again the DSI made an accurate call on a major top in gold and silver. The DSI reached nosebleed territory for gold about four weeks ago suggesting the metals were nearing shoal waters. Silver and platinum got stupid a week ago and I suggested a correction would be timely.
Investors should remember that when someone writes a recommendation or makes a comment no matter whom it is, they are expressing an opinion. I don’t give a damn how many facts or figures someone uses, it’s an opinion. But in my experience the use of the Daily Sentiment Indicator has proven very accurate calling the top in the stock market in 2018 and the bottom in late December. Now, once again it has identified a tradable top.
People got way too bullish on the metals. All I saw and heard was a ton of people talking about how high gold and silver were going to go. The number of outstanding contracts hit a record high. It always does at tops, that’s what makes it a top no matter how long it lasts. The weak hands buy at tops and sell at bottoms. They also are the biggest users of margin so once a decline gets serious they panic and start a cascading decline.
I am on record calling for a top in the overall market in September leading to a major crash starting in October. It’s just an opinion but I am getting my gas mask on and fixing to head to the nearest bunker.
Now many writers are talking about some minor correction before gold and silver once again bolt for the running rabbit. I don’t think so. With the record bullishness, you need both time and price to scare hell out of the weak hands and for sure that hasn’t happened.
When the DSI for gold and silver and platinum break under 10 you can put your life jacket back on and jump in. If the markets follow the traditional calendar, that will be about mid December.
Today is a full moon and as Tom McClellan has discovered in the past, his studies show that often the full moon marks either acceleration in the direction of movement or a reversal. In my opinion, I just don’t see the metals having shed the excessive bullishness so acceleration down seems a far better bet. Any time the speculators all insist on lining up on one side of the boat, the boat tends to sink. It might take a few days to see some action.
In a different vein, I want to thank the hundreds of people who wrote to me expressing their sorrow at the news of the death of my wife. We knew she was ill, she was tired and wanted out but still when it happened it was the biggest shock of my life. I miss her so.
I’ve learned a lot and while it may seem callous of me to run the website with tears on my face, I need something to make it worth breathing. Now I realize that life is a teeter-totter. The opposite side of deep love is incredible pain. I loved Barbara deeply and I mourn her greatly. Thank you if you were one of those kind enough to share your thoughts.